The Blog

November 13, 2013

The State of Salesforce

Eric Berridge, Co-Founder and CEO, Bluewolf

I had an interesting conversation with Eric Berridge, CEO of Bluewolf, last week about a new report his company sponsored, The State of Salesforce. This is the second year that the company has done this. In conjunction with MIT’s Sloan School the researchers interviewed hundreds of Salesforce’s customers to learn about their attitudes, opinions, and future demand. Parenthetically, I think this is an unusual approach—publishing, not researching—by a partner and it certainly highlights the importance that Salesforce has gained in this ever-expanding ecosystem.

I am not going to go through all of the findings but I encourage you to download the report here for more details.

Nevertheless, I do wish to elaborate on one of the more provocative findings snugly placed in the middle of the document—“Communities are the new CRM.” That’s a big statement and one that needs to have its multiple threads teased apart, and there are many. First off, is this hyperbole or can we take it with a grain of realism? I’d carefully say it’s real but it also bears watching.

According to the survey, 9 percent of the customers interviewed are already invested in Salesforce communities while 21 percent say they are planning to purchase Salesforce Communities licenses in the next year. Given the success of other community companies like GetSatisfaction and Communispace I’d have to say that this is a reasonable amount of proof; however, there is a big difference between saying you are going to do something and actually doing it, so keep watching those numbers. If next year’s report has something close to this year’s 9 percent plus 15 to 20 percent new purchases then I’d say that we’re on a hockey stick.

Next, you have to ask what this new CRM does and if it is a replacement for old CRM or just a new wrapper. Here I am less sanguine though I also recognize that things don’t evolve along nice parallel lines. Community based CRM might be really good for some things like problem triage and resolution, disseminating marketing information and opinion formation, but at some point in most businesses somebody’s got to sell something because customers won’t always simply be buyers. Therefore the functions of marketing and sales as well as support will still be needed though perhaps in different amounts and possibly through different means or channels.

One possibility that seems to be forming from this idea is that traditional selling will become a rare event replaced by rational people making purchase decisions on a continuous basis. This would make the rational market theorists happy and why not. The poster child of that movement, Eugene Fama of the University of Chicago just won the Nobel in Economics for just that kind of theorizing. Unfortunately, for fans of rational markets, Fama shared the prize with two others, one, Robert Schiller of Yale, takes a mostly distaff view of rational markets.

True, the work cited by the Nobel Prize committee focuses on markets for stocks and other financial assets, not sales of goods and services but a reasonable person would argue that rationality is rationality regardless of the market—if it really exists at all.

Personally, I have never known a sales manager who operated rationally. He or she always wanted not only all of the business on the forecast but they also wanted more than their fair share. So it’s hard for me to see how rational markets prevail in the real world and because of this, it is also hard to see life without SFA in the future world of “new” CRM.

At the same time though, community would be a logical next step in the commoditization process of front office functions. This goes all the way back to retail sales clerks actually waiting on you, which many retailers have eliminated in favor of low prices and self-service. Community brings self-service to fruition on the Internet while re-establishing, after a fashion, the face-to-face community of so many local markets that once stretched no further than your hometown and its merchants.

But perhaps I am being too literal on this point and the real information contained in the report is simply that we are in a transition state, which for my money is the only constant in life. We transitioned from spreadsheets to client-server CRM, then went to the cloud, and now, if Blue Wolf is right, it appears we are moving the whole shooting match (or most of it) to the community.

What this tells me for sure is that today, and especially tomorrow, the customer owns the customer experience AKA the vendor-customer relationship and that vendors who fail to grasp the change will someday look like dinosaurs that had just seen a bright spark of light in the sky. The world is rational most of the time, except on those special occasions when it isn’t. Then watch out.